Stocks opened mixed on Monday morning, and after some choppy pushing and pulling in a tight range, they ended mixed as well with minor losses in the Dow, and minor gains in the S&P 500 (C-fund), the S-fund, and the Nasdaq. Bonds were down as yields moved up and the 2-year Treasury moved back to 4%. It was a very light trading day as investors seem to be trying to figure out what is going on. As the debt ceiling deadline gets closer, the market seems to believe some kind of resolution will be made, as usual, and it continues to climb the wall of worry over that, the possibilities of a recession, continued inflation, higher interest rates, etc.
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It was a very slow, light volume trading day and it could just be some digestion of the news over the last couple of weeks between FAANG earnings, the Fed's interest rate hike, the jobs report, and renewed regional bank concerns.
The bond market is seeing higher yields based on some recent better than expected economic numbers. A gap was filled on the 10-year yield last week and now that is starting to look like a bull flag has been forming. Bull flags tend to break to the upside, so we have a battle over whether the Fed is done raising interest rates, and if the economy is going to remain as firm as it has been with a strong labor market.?
The dollar opened lower, but like everything else, it flipped and changed direction, and this may have been the catalyst for many of those reversals yesterday.
The Dow Transportation Index was up early yesterday but flipped over to lag after hitting a wall of tough resistance.
The Regional banks also opened higher but hit its own little wall before tumbling over yet again.
On the other hand I am keeping an eye on the Nasdaq which closed at a new 2023 high. The chart formation looks ripe for a breakout, and if that happens, will investors dump money into the other indices which have been lagging and may seem like more of a bargain? Or will the Nasdaq continue to be an island of strength unto itself? Apple was doing a good job of holding onto Friday's big gains, and the reason this is important is because as big tech and the Nasdaq go, the S&P is probably not going to be too far behind because of those big tech stocks being so heavily weighted in both indices.
The CPI for April comes out on Wednesday along with the Treasury Budget, so we have some catalysts to deal with. On Thursday we'll get the PPI report, which has become one to watch over the last year because of the Fed's battle against inflation.
Thank you to those of you who reported the access issues to TSP Talk yesterday. The server techs had to remove some old encryption code that was no longer needed, and was apparently causing issues with some recently updated operating systems software. We should be good to go. Sorry for any inconveniences this may have caused.
The S&P 500 (C-fund) ticked up slightly and that wasn't the worst thing that could happen after Friday's huge rally. At some point that large candlestick from Friday will get at least partially retraced, but the bears could not do that yesterday. Today could become a turnaround Tuesday, so it may be the better test for the bulls, and whether they can hold the S&P firm, or even move it near the recent highs. We've seen some big rallies stall on a Monday, then completely fail the next day - Tuesday. Big day!
DWCPF (S-fund) managed to close in positive territory and actually outperform the S&P 500 despite the weakness in the regional banks yesterday. Sounds good but the chart still has quite a few roadblocks in the way.
The EFA (I-fund) was up just 0.03% so the technical picture remains the same, although that 0.03% was actually a new closing high for 2023.
BND (Bonds / F-fund) fell again as yields rise on stronger economic data. This has been in a range like many of the stock indices. The F-flag in blue may be suggesting a break down, but 50 and 200-day moving averages have been holding it up for weeks now.
Read more in today's TSP Talk Plus Report. We post more charts, indicators and analysis, plus discuss the allocations of the TSP and ETF Systems. For more information on how to gain access and a list of the benefits of being a subscriber, please go to: www.tsptalk.com/plus.php
For more info our other premium services, please go here... www.tsptalk.com/premiums.html
To get weekly or daily notifications when we post new commentary, sign up HERE.
Thanks so much for reading. We'll see you tomorrow.
Tom Crowley
Posted daily at www.tsptalk.com/comments.php
The legal stuff: This information is for educational purposes only! This is not advice or a recommendation. We do not give investment advice. Do not act on this data. Do not buy, sell or trade the funds mentioned herein based on this information. We may trade these funds differently than discussed above. We use additional methods and strategies to determine fund positions.
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It was a very slow, light volume trading day and it could just be some digestion of the news over the last couple of weeks between FAANG earnings, the Fed's interest rate hike, the jobs report, and renewed regional bank concerns.
The bond market is seeing higher yields based on some recent better than expected economic numbers. A gap was filled on the 10-year yield last week and now that is starting to look like a bull flag has been forming. Bull flags tend to break to the upside, so we have a battle over whether the Fed is done raising interest rates, and if the economy is going to remain as firm as it has been with a strong labor market.?
The dollar opened lower, but like everything else, it flipped and changed direction, and this may have been the catalyst for many of those reversals yesterday.
The Dow Transportation Index was up early yesterday but flipped over to lag after hitting a wall of tough resistance.
The Regional banks also opened higher but hit its own little wall before tumbling over yet again.
On the other hand I am keeping an eye on the Nasdaq which closed at a new 2023 high. The chart formation looks ripe for a breakout, and if that happens, will investors dump money into the other indices which have been lagging and may seem like more of a bargain? Or will the Nasdaq continue to be an island of strength unto itself? Apple was doing a good job of holding onto Friday's big gains, and the reason this is important is because as big tech and the Nasdaq go, the S&P is probably not going to be too far behind because of those big tech stocks being so heavily weighted in both indices.
The CPI for April comes out on Wednesday along with the Treasury Budget, so we have some catalysts to deal with. On Thursday we'll get the PPI report, which has become one to watch over the last year because of the Fed's battle against inflation.
Thank you to those of you who reported the access issues to TSP Talk yesterday. The server techs had to remove some old encryption code that was no longer needed, and was apparently causing issues with some recently updated operating systems software. We should be good to go. Sorry for any inconveniences this may have caused.
The S&P 500 (C-fund) ticked up slightly and that wasn't the worst thing that could happen after Friday's huge rally. At some point that large candlestick from Friday will get at least partially retraced, but the bears could not do that yesterday. Today could become a turnaround Tuesday, so it may be the better test for the bulls, and whether they can hold the S&P firm, or even move it near the recent highs. We've seen some big rallies stall on a Monday, then completely fail the next day - Tuesday. Big day!
DWCPF (S-fund) managed to close in positive territory and actually outperform the S&P 500 despite the weakness in the regional banks yesterday. Sounds good but the chart still has quite a few roadblocks in the way.
The EFA (I-fund) was up just 0.03% so the technical picture remains the same, although that 0.03% was actually a new closing high for 2023.
BND (Bonds / F-fund) fell again as yields rise on stronger economic data. This has been in a range like many of the stock indices. The F-flag in blue may be suggesting a break down, but 50 and 200-day moving averages have been holding it up for weeks now.
Read more in today's TSP Talk Plus Report. We post more charts, indicators and analysis, plus discuss the allocations of the TSP and ETF Systems. For more information on how to gain access and a list of the benefits of being a subscriber, please go to: www.tsptalk.com/plus.php
For more info our other premium services, please go here... www.tsptalk.com/premiums.html
To get weekly or daily notifications when we post new commentary, sign up HERE.
Thanks so much for reading. We'll see you tomorrow.
Tom Crowley
Posted daily at www.tsptalk.com/comments.php
The legal stuff: This information is for educational purposes only! This is not advice or a recommendation. We do not give investment advice. Do not act on this data. Do not buy, sell or trade the funds mentioned herein based on this information. We may trade these funds differently than discussed above. We use additional methods and strategies to determine fund positions.
